Africa’s Data Centers: Plugged Into Progress

Nigeria, the West African nation of over 240 million people, is connected to major international submarine cable systems, giving its commercial capital Lagos access to substantial international bandwidth.

On the edge of Nigeria’s commercial capital Lagos, where the city gives way to the Atlantic, behind walls of concrete and steel are rows of machines designed to store, process and move the digital records of the West African nation.

Nigeria’s banks, fintech companies and payment processors have spent years building businesses on computing infrastructure that can sit anywhere in the world. Now, beginning January 1, 2027, the Central Bank of Nigeria (CBN) is requiring financial institutions and participants in the country’s payments system to ensure that payment transaction data generated in Nigeria is stored and managed in Nigeria.

Dr Ayotunde Coker, CEO of Pan-African data center operator Open Access Data Centres (OADC), says engagement with companies seeking local infrastructure has increased since the directive.

“We’ve got what I call a reasonable level of requests in terms of colocation. We’re ready to really onboard a lot as is required,” Coker discloses to FORBES AFRICA.

But the country’s other technology executives, engineers and AI specialists describe a reality bordering on shortage of reliable power, high-density cooling, redundant connectivity, cloud services, cybersecurity, disaster recovery, engineering talent and, perhaps most consequentially, control over the technology that processes Nigerian data.

“Data sovereignty is not achieved simply because the server is physically located in Nigeria. Physical location is only the first layer,” explains Kemisola Adalumo.

“Data sovereignty is not achieved simply because the server is physically located in Nigeria. Physical location is only the first layer,” explains Kemisola Adalumo, a Nigerian cybersecurity, governance, risk and compliance and AI-governance specialist, to FORBES AFRICA.

That distinction is becoming critical as Nigeria moves from an era of data storage into one dominated by AI.

Nigeria’s data-center market has changed in a relatively short period.

Industry estimates put the country at roughly 26 data-center facilities, with about 18 operating commercially. The figures vary depending on what qualifies as an operational facility and whether private corporate installations are included, but the country’s infrastructure footprint has expanded substantially.

Most of the commercial market is concentrated around Lagos.

OADC announced plans in 2025 for a $240 million expansion of its Lagos facility to 24MW by 2027. The project was described as part of a broader $500 million African investment program. Coker says the company is now designing for substantially more AI capacity than previously envisaged. He put the eventual figure at roughly 40MW within the same development shell.

Rack Centre commissioned its 12-megawatt (MW) LGS2 facility in 2025, describing it as a Tier III, carrier and cloud-neutral facility serving enterprises, cloud providers and financial institutions.

MTN Nigeria has also committed more than $240 million to a 9MW Dabengwa data center in Ikeja. Its first phase was designed as a 4.5MW Tier III facility, with cloud infrastructure developed in partnership with Dell Technologies.

The company broke ground in 2022 on what was initially described as a $250 million data-center campus in the Lekki neighborhood of Lagos. Four years later, the first phase has been commissioned. The broader campus is designed to scale toward 100MW and has been positioned as infrastructure for hyperscale cloud and AI workloads.

“We’ve got what I call a reasonable level of requests in terms of colocation. We’re ready to really onboard a lot as is required.” – Ayotunde Coker

That matters because conventional data-center infrastructure and AI infrastructure are different businesses.

A traditional enterprise workload can be distributed across relatively modest server densities. AI workloads, particularly those involving large numbers of graphics-processing units (GPUs), concentrate enormous amounts of computing power into comparatively small spaces. That changes the engineering equation: power, cooling, rack density and network architecture all become more demanding.

A February 2026 analysis by TechCabal noted that Nigeria’s then-operational data centers generally had capacities below 20MW, while hyperscale AI campuses target 50MW to 100MW or more.

Engineer Adetola Ibironke, General Manager for Systems Engineering and Projects at PPC Limited, argues that Nigeria remains in a “critical build-out phase”.

“Announced capacity must not be confused with operational capacity,” he says to FORBES AFRICA, noting that projects exist at different stages of construction, commissioning and customer onboarding.

That gap between announced and usable capacity is one of the least visible features of the boom.

A building can be finished while its computing equipment is still being installed. A facility can have power infrastructure without having the required IT load. A data center can have racks without the cloud platform, cybersecurity controls or network redundancy a financial institution needs.

The data-center industry uses tiers to describe levels of redundancy and availability.

Tier IV represents the highest level in the Uptime Institute’s tier classification system. In Nigeria, Galaxy Backbone’s northern Nigeria city Kano facility holds Uptime Institute certification for both Tier IV design documents and the constructed facility. Uptime’s database also lists numerous Nigerian facilities with Tier III certifications.

Galaxy Backbone describes its Kano installation as a Tier IV facility and its Abuja facility as Tier III.

But Tier classification answers a narrower question than AI operators now need to answer.

It addresses resilience and availability characteristics of the facility. It does not tell a bank whether a particular application can be migrated there without redesign. Nor does it determine whether the facility has sufficient GPU capacity, cloud services, data-governance controls, cyber defenses, network diversity or specialist personnel.

“Building a facility to a particular Tier standard does not automatically make the data hosted there secure, sovereign or resilient,” Adalumo says.

“A bank can store its primary records in Lagos and still send that same data abroad every day for analytics or technical support.” – Favour Egbogun

Dr Olayinka Iyinolakan, CEO of Indigenius AI, makes a similar distinction.

He sees Nigeria’s infrastructure progress as real but uneven. Much of the capacity that banks are likely to use for regulatory migration, he says to FORBES AFRICA, remains closer to conventional enterprise infrastructure than to the high-density environments associated with AI.

His concern is not that Nigeria lacks buildings.

It is that the country may confuse the buildings with the destination.

“Data centers are the floor, not the ceiling,” he says.

The industry’s most persistent problem, which is electricity, is older than AI and more fundamental than regulation.

Data centers cannot operate like ordinary office buildings. They require power continuously, with backup systems and redundancy designed to protect equipment from outages and fluctuations.

Nigeria’s national grid has improved in some areas but remains insufficiently reliable for the uninterrupted operation of large-scale digital infrastructure without substantial private generation and backup arrangements.

Industry executives consistently identify power availability as a principal constraint on African data-center expansion. The Africa Data Centres Association’s (ADCA) 2026 economic report says power availability has overtaken connectivity as the continent’s principal constraint, while its 2025 survey identified power reliability and talent shortages among the key limits to expansion.

That problem becomes more acute as computing becomes denser.

A facility designed for conventional enterprise workloads can require a very different electrical and cooling architecture from one intended for large GPU clusters.

Operators therefore spend heavily on generators, batteries, power-conditioning equipment and other forms of redundancy. Some are developing dedicated energy infrastructure.

Kasi Cloud, for example, has said its Lekki campus will use a combination of gas, solar and battery storage, with the facility designed to scale toward 100MW.

For Nigerian operators, however, much of the equipment required to build that resilience is imported.

Ibironke says operators face a compound challenge involving power generation, cooling and imported equipment, with currency volatility increasing the cost of infrastructure.

The result is a peculiar economics of Nigerian digital infrastructure.

Coker’s answer is to look beyond dependence on the grid. At OADC’s Lekki facility, he says the company is examining gas-based captive power as it expands.

“Africa’s opportunity has actually become power,” he says, arguing that countries with domestic gas infrastructure or usable hydropower could become attractive destinations for energy-intensive digital infrastructure.

The country needs more computing to reduce dependence on foreign infrastructure. But the physical systems required to build that computing capacity often depend on imported equipment and foreign capital.

The CBN regulatory clock which gives affected companies roughly six and a half months between the circular issued June 15 and the January 1, 2027 effective date makes all of this more urgent. Moving a database can be relatively straightforward. Moving the system around the database is not.

A bank’s payment architecture may include production databases, backups, disaster-recovery environments, monitoring systems, security logs, analytics platforms, third-party applications, customer-service tools and application programming interfaces connecting dozens of vendors.

Changing the physical location of one component without understanding the dependencies of the others can create new operational and security risks.

That is why the localization question is being framed as an architecture problem.

Business Day reported in July that banks had largely localized payment transaction data while fintechs, digital banks and other financial institutions that continued to host data overseas were facing more pressure to complete migrations. The report also described the sector as still working through infrastructure, cybersecurity and compliance issues.

The regulatory requirement itself is narrower than some public discussion suggests.

Nigeria already has a legal framework governing cross-border transfers of personal data.

The Nigeria Data Protection Act recognizes circumstances in which personal data can be transferred to foreign countries, subject to requirements such as an adequacy decision, an approved cross-border data-transfer instrument or specified legal bases.

In other words, data sovereignty is not synonymous with absolute isolation.

Nigeria can have local data centers and still participate in global digital infrastructure.

The harder question is who controls the systems around the data.

Coker, who previously served as Group Chief Information Officer (CIO) at Nigeria’s biggest lender Access Bank, says two financial institutions could arrive at different architectures while seeking to satisfy the same regulatory requirement.

“You could host data and process locally. You could host data locally and compute with your architecture internationally,” he says

Favour Egbogun, a doctorate researcher focused on AI governance at the Communications Department of southwestern Nigeria’s Covenant University, describes that as the difference between physical and operational sovereignty.

“A bank can store its primary records in Lagos and still send that same data abroad every day for analytics or technical support,” she shares with FORBES AFRICA.

That is why she argues that Nigeria needs clarity across the entire data lifecycle: who controls data, who processes it, who can access it, why they can access it and under which jurisdiction. For AI, the question becomes sharper still.

An AI model does not merely store information. It processes it.

A Nigerian bank could host its transactional database in Nigeria while relying on a foreign AI service to analyze customer behavior, transcribe calls, detect fraud or power a conversational assistant.

This is the central tension in Nigeria’s data-center expansion.

For years, the primary argument for local infrastructure was latency, compliance, resilience and data protection.

AI adds another variable: compute economics.

Training and running sophisticated AI models requires large quantities of computing power. The associated electricity and cooling requirements can be substantially higher than those of conventional enterprise applications.

Victor Okoye, CEO of Thspian, an AI-powered advertising technology company, argues that infrastructure should ultimately be judged by what businesses can do with it.

“Tier IV certification alone does not establish readiness for demanding AI workloads,” he tells FORBES AFRICA.

The relevant questions, in his view, include whether businesses can access computing power at a price they can afford, whether the power supply is reliable and whether cloud services are available alongside the physical infrastructure.

If local facilities become platforms for cloud computing, AI, cybersecurity, data analytics and enterprise software, the value chain becomes much larger.

Nigeria’s digital infrastructure has several advantages that did not exist at anything like the same scale a decade ago.

The country has developed extensive fiber infrastructure. Galaxy Backbone says its national backbone now extends across more than 5,000 kilometers and reaches nearly 30 states, with further expansion planned.

The broader African market is expanding as well. The ADCA estimates that Africa had about 360MW of live data-center capacity in 2026, with another 238MW under construction and 656MW planned. Yet, the continent still accounts for only about 0.6% of global data-center capacity despite having roughly one-fifth of the world’s population.

Nigeria is therefore competing not only to solve a domestic compliance problem but to capture a portion of a much larger digital infrastructure market.

For Ibironke, ownership does not mean isolation from global tech providers. “It means having enough local infrastructure, talent and technical capability to decide where our data lives and how it serves African enterprise.”

Adalumo argues that data sovereignty should encompass identity and access management, encryption keys, third-party dependencies, cloud architecture, incident response and recovery.

That may ultimately be the most useful definition of Nigeria’s data-sovereignty project.

Not shutting the country off from the world but having enough capability at home to negotiate with the world.

By Oluwatomisin Amokeoja. Oluwatomisin Amokeoja, a full-time multimedia journalist with FORBES AFRICA, covering West Africa’s most impactful stories in finance, technology, business, and innovation. Based in Lagos, he delves into economic develop…

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